In a trade or in general, there are some danger signs for a trader to avoid as soon as possible. Traders need to go with the flow of the market, manage risk, and keep their minds open to what the market is doing. If they don’t follow these rules, they could lose a lot of money or even blow up their accounts. It’s very dangerous to trade through the filters of fear, greed, or your own ego.
Danger Signs For A Trader
- You start thinking that you can break your own rules. Then, you start trading your beliefs instead of your trading plan. It’s time to stop and think about things again.
- Traders think they can’t lose and trade overconfidently. Because everyone else is already in those trades, they rarely win.
- When you don’t make your first stop and start thinking that you should give your trade “more room,” you’re in trouble. When you let a loss grow and figure out why you should keep it instead of stopping out, you’re in trouble.
- People who try to fight the trend are very risky, so doubling down on a losing bet is not a good idea.
- A lot of time and money can be lost if you fight against the market all the time.
- Losing: You trade more and more to make up for the money that you have lost. When you’re losing, you should start trading smaller and smaller to cut down on the amount you lose.
- When you don’t agree with the market and think it’s wrong and you’re right. It is a deadly practice. Price is real, no matter where it is. Your job is to trade the trend and price action, not your own opinion, and not to make your own trades.